KBank offers new 50-year mortgage

Competition in the mortgage market is heating up as Kasikornbank (KBank) offers the industry's longest mortgage instalment of 50 years.

KBank is looking to penetrate the lower-income segment of customers earning 16,300 baht a month, down from its earlier focus of 20,000 a month.

The longer maturity loans would make housing more accessible to lower-income earners via lower monthly payments. The previous maximum period for housing loans was 30 years, said executive vice-president Chatchai Payuhanaveechai.

Home prices are expected to increase by 5-10% this year.

Typically for mortgages, 1 million baht in credit is available for clients with monthly incomes of 20,000 baht for monthly payments of 8,000 baht over 20 years.

KBank's new loan package would also allow customers purchasing higher-priced houses more flexibility. For example, usually customers earning 50,000 baht per month can buy a house costing 2.7 million baht with monthly instalments over 30 years. But over 50 years, these customers can buy houses priced up to 2.91 million baht, he said.

"The new mortgage package should help to reduce their financial burden per month. Customers can also pay a lump sum in later years to reduce interest charges without a fee," he said.Mr Chatchai added KBank charges no interest for the first six months of the new loans.

Other promotional sales are available, and the bank aims to grow new loans under its promotions to 20 billion baht. Its annual target is 50-55 billion.

The maximum age for a borrower in the new scheme is extended to 80 from 60. For example, customers have to be 30 or younger to receive a 50-year mortgage, as 80 is the oldest they can be in the project. Those who are 45 will receive a maximum 35-year mortgage.